After complaints about the dearth of news in the market lately, traders are getting their fill today with the release of some important economic data and a slew of merger-and-acquisition announcements.
The M&A items are nice and all, especially for those with sizable positions in the stock of a takeover target. But today the movements of the market are being dictated by the economic data, and those data have sent shivers through the inflation and higher-interest-rate fearful market.
National Association of Purchasing Management
index for May rose to 55.2 from 52.8 in April, while the prices paid index rose to 52.2 in May from 49.9 in April.
Stocks and bonds, which opened on the slushy side anyway, extended their weakness after the release of the NAPM report, which came in stronger than Wall Street's expectation of 53.4.
As for the Treasury market, it was getting crushed in the wake of the NAPM news and on some comments by
New York Fed
, who said it's unclear that the big hop in the April
Consumer Price Index
was a one-time event. The 30-year bond was lately down 1 9/32 to 90 16/32, yielding 5.93%. (For more on the fixed-income market, see today's early
Meanwhile, the bond market has the pleasure of looking forward to Friday's slated release of the May
The rise in the long bond's yield has meant more bad news to big-cap stocks with high price-to-earnings multiples, which have suffered in part because of the bond's recent decline and the prospect of a
rate hike. The fed funds futures contract now is pricing in a 90% chance of a hike at the June 29-30
Federal Open Market Committee
Nasdaq Composite Index
was down 40, or 1.6%, to 2431. Nasdaq heavyweights
were all weaker.
Among tech-sector gauges, the
Philadelphia Stock Exchange Semiconductor Index
was off 0.5%. The
Morgan Stanley High-Tech 35
was down 1.7%, while the
was down 1.8%.
In blue-chip land, the
Dow Jones Industrial Average
was down 112, or 1.1%, to 10,448. Reflecting a theme in the staggering market today, tech behemoth
(down 4 7/16 to 111 9/16) and investment banking giant
(down 4 15/16 to 134 3/8) were among the biggest drags on the Dow.
was off 16, or 1.3%, to 1286.
Bruce Bittles, market strategist at
in Nashville, Tenn., said while the market's decline now is painful, he said he's looking for the market -- between now and the FOMC meeting -- to set itself up for a July/August rally. But for that rally to occur, the Fed has to hike interest rates.
Bittles said if the S&P 500 falls to the 1255-to-1265 area, that would be the area where a rate hike would be factored in.
Internet stocks, after climbing Friday, resumed their recent descent.
TheStreet.com Internet Sector
index was down 15, or 2.6%, to 566. Among the big losers in the index were
, which fell in the wake of a negative story in this week's
. The stocks were down 5.4% and 4.7%, respectively.
was down 3, or 0.6%, to 436.
Along with a notable decline in tech and Internet stocks, financials were taking a beating. The
Philadelphia Stock Exchange/KBW Bank Index
was down 2.2%, while the
American Stock Exchange Broker/Dealer Index
was off a steep 4.6%.
Dan Marciano, head of trading at
, pointed out around midmorning that there wasn't a lot of volume and said he thought a lot of people were still out for the long weekend.
"I don't think it breaks 10,000 again," he said of the Dow. He added that today's selling was not of the panic variety.
New York Stock Exchange
, decliners were outpacing advancers 1,789 to 1,039 on 372 million shares. On the
Nasdaq Stock Market
, losers were beating winners 2,052 to 1,509 on 403 million shares.
On the NYSE, 26 issues had set new lows 52-week while 19 had touched new highs. On the Nasdaq, 51 issues had set new highs while new lows totaled 23.
On the Big Board,
was most active, with 8.1 million shares changing hands. It was down 3 3/4 to 115 1/2.
On the Nasdaq,
was most active, with 12.7 million shares changing hands. It was down 9/16 to 33 13/16.
Meanwhile, among other indices, the
Dow Jones Utility Average
was down 1.7%. The
American Stock Exchange Composite Index
was down 0.5%. The
Dow Jones Transportation Average
was up 0.9%.
Tuesday's Midday Movers
was falling -- just like its newly made Internet neighbors -- after
announcing plans to offer online trading in December with a basic charge of $29.95 a trade for U.S. equities. The stock recently was down 6, or 7.1%, to 78.
was down 3 7/8, or 8.7%, to 40 5/8 after saying it will buy
in a stock deal valued at $1.8 billion. E*Trade will exchange 2.1 of its shares for each share of Telebanc. Telebanc was rising 10 1/16, or 15.2%, to 76 7/16. Today's session is E*Trade's first as a component of TheStreet.com Internet Sector index; it replaces
, whose acquisition by fellow index member
was completed Friday.
Elsewhere in Net news,
was down 6 7/16, or 5.4%, to 112 1/4 after a negative piece in
detailed problems the company faces in making a profit and in dealing with competitors.
gave his take on the issue this morning.
Barnes & Noble
was down 1 1/16 to 27 1/8 on word the
Federal Trade Commission
will oppose the bookseller's plan to merge with
Ingram Book Group
, arguing the acquisition of the book wholesaler would violate antitrust laws.
was down 3 1/4, or 14%, to 20.
In other news:
was down 5 9/16, or 11.8%, to 41 1/2 after filing with regulators for a 3.5 million-share offering.
Complete Business Solutions
was down 7 5/8, or 31.5%, to 16 5/8 after
downgraded the stock to buy from strong buy. The firm also lowered its 1999 earnings estimate for the company to $1 a share from $1.20 and cut its 2000 view to $1.45 from $1.60. Cowen cited delays in the company's offshore projects and a transition in the offshore staff's skill base which could influence utilization rates.
Crompton & Knowles
was up 1 1/4, or 6.8%, to 19 5/8 and
was up 5/16 to 17 13/16 after the specialty chemical companies said they are planning a merger of equals "aimed as much at cutting costs as at boosting revenues." The merged C&K Witco would be formed by swapping each Crompton & Knowles share for one C&K Witco share and each Witco share for 0.92 of a share of the new company.
was up 3 3/16, or 7.8%, to 44 after
agreed to acquire the company in a stock swap valued around $6.3 billion. First American shareholders will receive 1.87 AmSouth shares for each share held. AmSouth was down 3 13/16, or 13.4%, to 24 9/16.
was up 3 1/8, or 8.4%, to 40 9/16 after
Credit Suisse First Boston
started coverage with a buy and a price target of 44 a share.
was down 2 3/4 to 57 after
Banc of America Securities
slashed it to hold from buy, saying a recent survey of corporate and public buyers "leads us to no other conclusion than that we'll see a significant computer hardware spending falloff in fourth-quarter 1999 and, to a lesser extent, the first quarter of 2000." The firm also dropped
, which lately was down 3 1/16 to 91 1/4, to hold from buy.